This paper assesses the current status of the climate finance landscape, mapping the life cycle of finance flows, i.e. the sources of finance, intermediaries involved in distribution, financial instruments, and final uses. At least $ 97 billion per annum... See More +This paper assesses the current status of the climate finance landscape, mapping the life cycle of finance flows, i.e. the sources of finance, intermediaries involved in distribution, financial instruments, and final uses. At least $ 97 billion per annum of climate finance is currently being provided to support low-carbon, climate-resilient development activities, not all of which is additional to the finance available prior to the Copenhagen Accord. This includes some developing countries and domestic sources, although to a limited extent. The amount of private finance is almost three times greater than public finance. Out of the $97 billion in global climate funding, on average $55 billion is provided by the private sector, while at least $21 billion is provided by public budgets. Private funding is in the form of direct equity and debt investments, to which bilateral and multilateral agencies and banks also contribute another $20 billion by leveraging the public funding they receive. A relatively small share, less than $3 billion, is provided by carbon markets and voluntary / philanthropic contributions. Public finance is raised through carbon market revenues, carbon taxes, and general tax revenues. The relatively small role of the public sector compared to the private sector is a reminder of the fact that capital investment is crucial for any mitigation and adaptation activities. Many developing countries lack developed capital markets – i.e. a well-functioning banking system, a public debt market and/or a public equity market, requiring them to rely, instead, on international capital investments. The poorest countries must rely on development banks.
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